Taiwan Semiconductor Manufacturing Co. (TSMC) plans to open a chip packaging facility in Arizona by 2029, marking a significant expansion of its U.S. operations aimed at addressing supply chain bottlenecks in advanced semiconductor manufacturing. The announcement came during a conference in Santa Clara, California, where TSMC executives confirmed that construction on the plant has already begun.
Advanced packaging technologies are critical for modern artificial intelligence chips, such as those produced by Nvidia, which often integrate multiple chips combined into a single module. Currently, many chips manufactured at TSMC’s existing Arizona facility must be shipped back to Taiwan for this packaging process, creating logistical and supply constraints.
TSMC initially disclosed its plans to establish the packaging plant during a January earnings call, noting that it was seeking permits to begin construction within an existing Arizona site but did not provide a specific timeline for the project’s completion at that time. Now, with construction underway and a target opening in 2029, TSMC aims to localize more of the chip production process, reducing dependency on overseas packaging services.
The move coincides with efforts by Amkor Technology, a packaging subcontractor, which announced plans in 2025 to build a packaging factory in Arizona by mid-2027, with production expected to start by early 2028. Amkor has reportedly been collaborating with clients such as Apple and Nvidia and working alongside TSMC since 2024 to bring several advanced packaging technologies to the state.
TSMC’s expanded presence in Arizona reflects the broader industry trend of diversifying semiconductor supply chains and increasing domestic manufacturing capabilities amid global shortages and geopolitical considerations. Both TSMC and Amkor’s investments are seen as key steps toward alleviating current packaging capacity constraints, particularly for high-performance chips used in artificial intelligence and other cutting-edge applications.